RR No. 5-2026: How a WESM Market Participant Other Than a Generation Company Reports the IEMOP 2% Withholding

RR No. 5-2026’s 2% withholding on IEMOP’s gross WESM remittances covers “generation companies and other market participants” — not generation companies alone. An aggregator, a retail electricity supplier, or a distribution utility that also trades on the Wholesale Electricity Spot Market (WESM) receives the same BIR Form 2307 a generator does, for the same reason: it sold electricity through the WESM and received a gross remittance from IEMOP. This post covers how that kind of participant — one that typically also has bilateral-contract revenue with no IEMOP withholding at all — separates the two income streams when reconciling SAWT.

This post is part of the BIR Form 2307 series. It builds directly on RR No. 5-2026: IEMOP Withholds 2% on Electricity Sales and Issues BIR Form 2307 to Generators, which covers the regulation’s text and a generator’s worked example; this post covers the “other market participants” half of the same provision.

Who counts as an “other market participant” under RR No. 5-2026? #

RR No. 5-2026 defines the covered payee class by what it does, not by what kind of company it is: any entity that sells electricity through the WESM and receives gross remittances from IEMOP in settlement for those sales. The regulation’s operative text, already quoted in the companion post on generators, applies the same 2% rate without carving out a narrower class for generators specifically:

“Remittances of the Independent Electricity Market Operator of the Philippines (IEMOP) to generation companies and other market participants. – On the gross remittances by IEMOP to generation companies and other market participants for electricity sold through the Wholesale Electricity Spot Market (WESM). – Two percent (2%)”

— Section 2, Revenue Regulations No. 005-2026, amending Section 2.57.2 of RR No. 2-98

The regulation’s own definition of “generation companies and other market participants” is similarly functional: it describes “entities that sell electricity through the WESM and receive gross remittances from IEMOP in settlement for such transactions,” which on its face covers an aggregator consolidating smaller generators’ output, a retail electricity supplier (RES) sourcing part of its supply from the spot market, or a distribution utility selling surplus power through the WESM — any of them, once they sell through the WESM and are remitted by IEMOP, sits inside the same withheld class a generator does.

The practical complication: mixed WESM and bilateral revenue #

Most non-generator market participants don’t sell exclusively through the WESM — a retail electricity supplier or aggregator typically also has bilateral supply contracts with specific counterparties, and those bilateral sales are not remitted by IEMOP and are not covered by RR No. 5-2026’s withholding at all. This is the detail the companion post on generators flagged but didn’t resolve: “a generator that sells only under bilateral contracts outside the WESM does not appear to be described by this rule for those sales.” For a participant with both revenue streams, the practical question isn’t whether withholding applies — it’s keeping the two streams from being reconciled against each other.

Worked example: an aggregator with split revenue #

Suppose a power aggregator sells electricity both through the WESM and under a direct bilateral supply contract with a distribution utility in the same quarter. The figures are fictional and illustrate the mechanics only.

The aggregator’s SAWT for the quarter carries two distinct lines: one for IEMOP’s ₱360,000 CWT on the ₱18,000,000 WESM remittance, and a separate line (or none, if the bilateral buyer didn’t withhold) for the ₱22,000,000 bilateral contract. Combining the two into one reconciliation line — for example, trying to match the full ₱40,000,000 in revenue against the single ₱360,000 IEMOP certificate — would make the SAWT look short by exactly the amount the bilateral contract should never have been expected to generate a certificate for in the first place.

What a non-generator participant should check each quarter #

1. Confirm which of the quarter’s electricity sales actually went through the WESM versus under a bilateral contract, before expecting any particular certificate.
2. Watch for IEMOP’s certificate by the 20th day after quarter-end — the same deadline that applies to generators — and flag a gap if the WESM-sourced certificate hasn’t arrived by then.
3. Keep WESM and bilateral revenue on separate SAWT lines, each matched to its own actual withholding certificate (or lack of one).
4. Don’t assume non-receipt of a certificate means no WESM sales occurred — confirm against the participant’s own WESM settlement records before concluding a certificate is simply late or missing; for the general certificate-chasing process, see What to Do If a Client Won’t Give You Your BIR Form 2307.

Frequently asked questions #

Does RR No. 5-2026’s 2% withholding apply only to generation companies? #

No. Section 2 of RR No. 5-2026 withholds 2% on IEMOP’s gross remittances “to generation companies and other market participants” for electricity sold through the Wholesale Electricity Spot Market (WESM). An entity other than a generation company — such as an aggregator, a retail electricity supplier, or a distribution utility — that sells through the WESM and receives a gross remittance from IEMOP is covered by the same withholding and the same BIR Form 2307, as long as it meets the regulation’s definition of a market participant.

What if a market participant sells both through the WESM and under bilateral contracts? #

Only the WESM-sourced revenue is withheld by IEMOP under RR No. 5-2026 and supported by IEMOP’s BIR Form 2307. Revenue from bilateral contracts outside the WESM is a separate sale to a separate counterparty, with its own withholding treatment (or none) depending on who the buyer is — it is not covered by IEMOP’s certificate and should not be reconciled against it.

How does a non-generator market participant report the IEMOP certificate in SAWT? #

The participant reports the BIR Form 2307 IEMOP issues on its SAWT the same way any CWT certificate is reported — by payor, amount, and ATC — but only for the gross remittance amount the certificate actually covers. Bilateral-contract revenue with no corresponding certificate from IEMOP should not appear on the same SAWT line as the WESM remittance, since the two are different income streams from different payors.

Does the market participant also need to track IEMOP’s certificate deadline? #

Yes. RR No. 5-2026 requires IEMOP to issue the certificate to each electricity seller subject to withholding on or before the twentieth day after the close of the taxable quarter, or upon the payee’s request. A market participant reconciling its own quarterly WESM revenue should expect the certificate by that date and flag a gap if it hasn’t arrived.

Summary #

RR No. 5-2026’s 2% IEMOP withholding reaches “generation companies and other market participants” alike — an aggregator, retail electricity supplier, or distribution utility selling through the WESM receives the same BIR Form 2307 a generator does. The reconciliation work for a non-generator participant is mainly about separation: keeping WESM-sourced revenue (withheld, certificated by IEMOP) apart from bilateral-contract revenue (a different counterparty, a different or absent certificate) rather than treating all electricity revenue as one reconciliation line. See RR No. 5-2026: IEMOP Withholds 2% on Electricity Sales for the regulation’s full text and a generation company’s worked example.